CONAGRA

An Unhealthy Choice For Farmers, Workers, Consumers and Environment?

By A.V. KREBS

Special to the Progressive Populist

Everett,
Wash.

ConAgra Inc., is the nation's second largest food manufacturer. It is the
only major food company that operates across the food chain -- providing
feed, fertilizers and chemicals to farmers and ranchers, trading meat and
grain, and producing packaged foods for consumers.

In attempting to demonstrate the nearly complete control that corporations
have now acquired over our everyday lives, the Alliance for Democracy, a
fledgling two-year old national populist movement, believes that food and
the process by which we obtain our food is the appropriate place to begin
an effort to achieve both corporate responsibility and corporate accountability.

The Alliance for Democracy (AfD), in its effort in seeking to end large
corporation's domination of our economy, our government, and our culture,
seeing the corporation's role as illegitimate in a self-governing democracy,
believes that the time is now to publicly dramatize the need for corporate
responsibility and accountability.

In ConAgra the Alliance sees a corporation that clearly reflects not only
the prototype of a modern transnational corporation, but also one which
graphically illustrates the unhealthy prices that family farmers, workers,
consumers, the environment and our communities are being required to pay
to support such corporate behemoths. It believes the record shows that by
many of its recent actions ConAgra can be considered antithetical to the
common good.

The AfD points to some recent examples:

(ogonek) ConAgra Inc. earlier this year agreed to pay $8.3 million in penalties,
including a criminal fine of approximately $4.4 million, to settle federal
fraud charges pleading guilty to a felony charge of wire fraud. In addition,
ConAgra agreed to plead guilty to misdemeanor charges of misgrading crops
and adding water to grain.

ConAgra officials have maintained that the company's sophisticated watering
systems were used to suppress the grain dust that can fuel elevator explosions.
But the water also increases the weight of the grain, and thus its market
value, because grain is sold by weight. The government investigation focused
on whether Peavey Grain elevators around Terre Haute, Ind., and elsewhere
padded profits by excessively dousing crops -- which the government considers
"economic adulteration."

The Justice department said ConAgra reaped $3.5 million in criminal profits.
U.S. attorney Judith A. Stewart also announced that the company agreed to
plead guilty to charges that it systematically cheated farmers who sold
crops to a dozen of ConAgra's Peavey grain elevators in Indiana from 1989
to 1992.

Among other things, ConAgra employees doctored samples of grain being offered
by farmers to make the crops appear to be of lower quality, and thus less
valuable, according to documents in federal court in Indianapolis.

(ogonek) In September, 1992 some 100 undocumented workers were arrested
in a raid on a Monfort meatpacking plant in Grand Island, Nebraska and were
deported. In all, 307 illegal immigrants, most from Mexico, were arrested.
Subsequently, the company, which is a wholly owned subsidiary of ConAgra,
was fined $103,000 by a federal judge after pleading guilty to 25 counts
of knowingly hiring undocumented workers and one count of engaging in a
pattern and practice of employing aliens at its Monfort facility.

(ogonek) In the summer of 1995, ConAgra abruptly canceled poultry producing
contracts with over 178 independent contract growers in the southern United
States. In offering new and what one producer described as "abusive"
contracts, ConAgra demanded binding arbitration be included.

A typical poultry contract is a unilateral contract, often referred to as
a contract of adhesion. An adhesion contract is simply a "take it or
leave it" contract. Frequently a farmer who has borrowed one-third
to a half million dollars in order to secure a business contract with a
processor like ConAgra has no option other than to sign, even if it means
giving up his or her constitutional right to access their state and federal
courts should anything go amiss in terms of fraud or dispute.

Some 53 families, at the risk of losing their farms and their homes, refused
to accept such terms, saying it was clearly a violation of their freedom
of speech. ConAgra's cancellation of contracts, many of the producers believed,
came in retaliation for an earlier court suit brought on behalf of some
300 poultry growers in the region where a federal court jury awarded the
producers some $17 million after they presented evidence of being cheated
by ConAgra on the weight of their birds.

(ogonek) In 1991 the Exxon Corp. made a secret deal with seven Alaska seafood
processors whereby the seafood processors settled claims with Exxon for
about $70 million, but then promised to return to Exxon any money they received
from awards of punitive damages. After the jury awarded $5 billion in such
damages against Exxon, the nation's largest oil company, the seven processors
put in claims totaling $745 million, or 15 percent of the $5 billion. The
seafood processors, however, had previously and privately agreed to "kick
back" the $745 million to Exxon if their claims were upheld, and in
turn receive from Exxon $12.4 million.

One of those seafood processors was Trident Seafood Corp., at the time a
wholly owned subsidiary of the ConAgra Corp. Presiding Federal Court Judge
H. Russel Holland of the U.S. District Court which tried the case, in a
June 13, 1996, decision, described the arrangement as an "astonishing
ruse," saying Exxon had deceived the jury and acted as "Jekyll
and Hyde" by "behaving laudably in public and deplorably in private."

(ogonek) A federal court ruled that Golden Valley Microwave Food, a ConAgra
subsidiary, obtained patents through "deception," concealing information
from the government, filing fake affidavits, misrepresenting test results
and unlawfully claiming another company's invention as its own. Golden Valley
Microwave Foods was also one of several companies that agreed to pay $6.8
million to settle a price fixing lawsuit after a federal court ruled in
1991 that "sufficient evidence exists that Golden Valley engaged directly
or acquiesced in a pricing conspiracy."

(ogonek) In April 1996 Monfort abruptly closed its Des Moines, Iowa, plant
giving some 1322 workers just one day's notice of termination. In announcing
that ConAgra was cutting 6500 jobs planning to alter or shutting down 29
plants Philip Fletcher, ConAgra CEO and chairman declared: "For our
shareholders and employees, this is the right step to make ConAgra more
competitive, more secure, more profitable."

(ogonek) After ConAgra agreed in 1983 to buy Armour Foods Co. from Greyhound,
it said it would retain Armour's 2,250 union workers only if they agreed
to concessions. The workers refused an hourly pay cut to $8 from $10.69,
so Greyhound dismissed them and shut down the plants shortly before ConAgra
assumed possession. When ConAgra reopened the plants, including one in Mason
City, Iowa, a few days later, they announced they had hired new workers
at "competitive compensation" -- an average base wage of $6 an
hour.

Later, ConAgra officials, after being accused of discriminatory hiring practices,
but without admitting any wrongdoing, agreed to a $6.6 million settlement.
In addition to back pay plus interest, the settlement called for job offers,
retroactive seniority and preferential hiring rights for the union workers.

ConAgra, Latin for "in partnership with the land," is the second
largest food manufacturing company (behind Philip Morris) in the U.S. with
1996 sales of $24.82 billion and with earnings of $545.2 million, as compared
with the previous year's earnings of $495.6 million. It is estimated that
six cents of every dollar Americans spend for food goes to ConAgra.

In 1996 ConAgra's return on common equity (profitability) was 24.3 percent.
It's 1992-96 yearly average was 23.4 percent. Had a person invested $30,000
in ConAgra stock in 1974 and sold it in May 1992 it would have been worth
$5 million.

ConAgra is currently:

No. 3 in marketing fed beef.

No. 2 in beef packing (CR4 = 87%)

No. 3 in pork packing (CR4 = 60%)

No. 4 in broilers (CR4 = 45%)

No. 1 in turkeys (CR4 = 35%)

No. 1 in sheep slaughter (CR4 = 73%)

No. 2 in flour milling (CR4 = 62%)

No. 4 in dry corn milling (CR4 = 57%)

CR4 = Refers to the market concentration percentage of the top four firms.

ConAgra's principal business in terms of growth has been its prepared foods
segment (including its over $1 billion flagship brand) "Healthy Choice",
which has accounted for more than three-quarters of its total sales. The
corporation typically has 80-100 "acquisition candidates" in screening
at all times. ConAgra has described itself as "a mutual fund of the
food chain" with "about 70" operating units "across
the food chain." It has seen increases in sales and profits every year
for the past 15 years.

Currently ConAgra's board of directors, which reads like a who's who of
American business, is comprised of members who also serve as board members
of the following corporations:

Clayton C. Yeutter, past president and CEO of the Chicago Mercantile Exchange,
former U.S. Secretary of Agriculture, domestic affairs advisor to President
George Bush and U.S. trade representative, was named to ConAgra's board
of directors in December 1992. He also serves on the boards of Texas Instruments,
FMC Corp., Oppenheimer Funds, B.A.T. Industries, and Farmers Insurance Co.

As the University of Missouri rural sociologist Bill Heffernan points out,
"We no longer have a competitive agriculture sector in the U.S. The
food system resembles an hourglass with many producers and millions of consumers,
but the few firms that control the processing are in a position to control
the food industry.

"There is a general assumption," Heffernan said, "that when
four firms control 40 percent or more of the market, the market no longer
behaves as a competitive market. The conclusion to be drawn is that for
poultry meat, cattle, pork, sheep, wheat, soybeans and corn processing,
United States farmers no longer sell in a competitive market."

Also, says Heffernan, "a few firms -- names like ConAgra, Cargill,
Archer Daniels Midland, Bunge and IBP -- now appear on the list of several
commodities." And "a few of these firms control the food system
from 'seed to shelf.' "

He cited ConAgra which operates elevators and owns railroad cars and barges.
It's one of the four top firms in processing of poultry, beef, pork, sheep
and wheat.

"With this type of an integrated food system, one can ask: Where do
farmers fit into the overall production process, and how do the farm family
and the rural community benefit?" Heffernan asks. He believes control
by a relative few companies allows them to "receive a disproportionate
share of the economic benefits from the food system."

Since early August, the Alliance for Democracy has been engaged in its fall
harvest Food Action Campaign throughout the nation, making ConAgra Inc.
the campaign's focal point. The campaign consists of two stages, while also
seeking the ideas and participation of local and national farm, worker,
environmental and consumer groups.

The AfD prepared "The People's Report" on ConAgra, which includes
an 18-page "Corporate Profile" and an eight-page "Bill of
Particulars." These reports are being circulated to the AfD's approximately
50 local alliances across the US. They can be obtained by sending a 10 x
13 stamped ($1.47) self-addressed envelope to AfD's Food Action Campaign,
P.O. Box 2201, Everett, Wash. 98203-0201

These local alliances, along with other farm, labor, environmental and consumer
organizations and groups, are being urged to join with the Alliance for
Democracy throughout the nation in planning a local non-violent action on
Thursday, September 25 at one of the Company's facilities in their area.
The date September 25 coincides with ConAgra's annual stockholders meeting
in Omaha, Nebraska.

At that meeting the Food Action Campaign representatives will present to
the stockholders and the ConAgra management a list of its corporate accountability
expectations. These demands, in keeping with the AfD's historic populist
roots, will be presented as the Omaha Platform of 1997.

Just as the populists of the late 19th century framed their grievances,
criteria and alternative solutions to the concentration of capital in the
historic Omaha Platform of 1892, the AfD, after inviting its membership
and allies to submit their corporate accountability demands, will present
those demands in a modern-day version of that famous document both inside
and outside of the September 25 meeting.

The Omaha and local actions on September 25 will be but the kickoff of the
AfD's harvest season Food Action Campaign, with other events and actions
scheduled for such locations as its National Convention outside of Kansas
City, Missouri on October 30-31 and November 1-2.